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Beaujolais Bath Marks Japan as Benchmark for New Vintage: Retail

November 13, 2013

Beaujolais Nouveau Wine

“Japanese people like new things,” said Akiharu Katsuta, 39, a Tokyo call-center employee who was first smitten with the bug a decade ago. “We’re used to not aging sake and so many people don’t age wine either. Beaujolais Nouveau fits into that custom very well. It’s become like a festival here.” Photographer: Akio Kon/Bloomberg

Le Beaujolais Nouveau est arrive! Or at least, the inaugural shipment of this year’s batch touched down last week in Japan, the biggest buyer of the fruity red wine. It’s also the first market of note that will begin the business of drinking the stuff in eight days’ time.

With Japan accounting for more than half of overseas sales, the scale of post-party hangovers will be a barometer for the central French region’s most famous vintage. While Japanese imports gained 10 percent a year over the past three years, volumes remain about a third off their 2004 peak, and a weaker yen is creating headwinds for this year’s crop.

“We would be happy for the volume to gain 10 percent once more, but at least, we expect sales to be stable,” said Aurelie Vabre, a spokeswoman for Inter Beaujolais, a Villefranche-sur-Saone-based group representing producers.

The Japanese turned crazy for the vintage in the late 1980s, when France let bottles of the weeks-old and barely fermented wine be shipped and stored overseas in advance of the release date at midnight on the third Thursday of November. That meant Japanese consumers were among the first to taste the new vintage, sparking a craze that will see about 8 million bottles quaffed this year in the country.

“Japanese people like new things,” said Akiharu Katsuta, 39, a Tokyo call-center employee who was first smitten with the bug a decade ago. “We’re used to not aging sake and so many people don’t age wine either. Beaujolais Nouveau fits into that custom very well. It’s become like a festival here.”

Bathing in Red

Tasting sessions in a wine-infused hot spring, advance orders at local 7-Eleven stores and advertisements for cork-popping parties are signals that Japan’s Beaujolais obsession is far from dead. Asahi Group Holdings Ltd. (2502) and Sapporo Holdings Ltd. (2501), Japanese beermakers that import and distribute the wine, either increased or received better-than-expected orders.

Wal-Mart Stores Inc. (WMT:US)’s Japan unit, Seiyu GK, is selling 750-milliliter bottles of the wine from 870 yen ($8.75), while prices for a full bottle of Beaujolais Nouveau start at 1,800 yen from Sapporo Holdings Ltd., according to the Tokyo-based company’s website.

Still, Prime Minister Shinzo Abe’s use of a weak-yen policy to stimulate economic growth is making French tipples more expensive. Shuhan News, Japan’s biggest beverage magazine, says volumes may drop 0.4 percent this year, according to its survey of 41 leading importers.

While demand for Beaujolais is soaring in some emerging markets, volumes aren’t enough to offset declines in richer countries. Exports to China of 296,600 bottles last year made it the drink’s sixth-biggest market -- still barely 2 percent of Japanese consumption.

Room to Grow

There’s ample room for Japan’s demand to grow. The 127 million people in the world’s third-biggest economy rank 30th out of 34 for wine drinking in the Organization for Economic Cooperation and Development -- sipping only 1 bottle for every 11 sunk in France, Wine Institute data show. Yet demand soared 62 percent between 2008 and 2011, the fastest pace in the OECD after tiny Estonia’s 72 percent. Consumption shrank in eight developed markets.

Exactly how Japan converted to Beaujolais may never be known, but one plausible version begins in November 1978 at Tokyo’s New Otani Hotel. It was in the hotel’s top floor French restaurant that Geoff Tudor, a British spokesman for Japan Airlines Co. (9201), invited a small group of wine and food writers to sample six cases he’d flown in.

“In Japan, we were looking for a new cargo to ship into the country,” said Tudor, now retired. “There was a cargo imbalance. We would ship out hi-tech, hi-value goods and there wasn’t that much to ship back.”

Great Race

At the time, Beaujolais was released at midnight on Nov. 15 in central France, a practice that spawned races to rush the new vintage by fast cars, motorbikes and planes to drinkers. Bacchanalian breakfasts were all the rage in 1980s London.

Tudor said he wanted to bring the same buzz to Japan. Though with 6,200 miles to cover, Japanese drinkers would never be the first in line. Then in 1985, the current rules were brought in: five years later, Japan Airlines filled five Boeing Co. 747 freighter flights with 900,000 bottles. JAL’s biggest domestic rival, ANA Holdings Inc. (9202), got in on the boom and now ships more of the wine, said Ryosei Nomura, a spokesman.

Shipments peaked at 12.5 million bottles in 2004.

Tudor reckons one reason the wine took off so quickly in Japan was that critics and food writers had been primed by his yearly parties.

Production of Beaujolais Nouveau, which is bottled after just six or eight weeks to give it a fresh and fruity taste that’s low in the tannins that can make wine bitter, has jumped to an average of 32 million bottles annually in recent years, Inter Beaujolais says. That’s up from about 2 million in 1954.

Prices Rising

Prices are rising in Japan after the yen weakened more than 20 percent against the euro in the past year. Suntory Holdings Ltd. is raising the tag on its Beaujolais Nouveau by an average of 7 percent this year, spokeswoman Hasumi Ozawa said.

Asahi, Japan’s biggest beermaker, increased orders by 3.7 percent to 36,930 cases, said Takuo Soga, a spokesman. Sapporo, Japan’s fourth-biggest, received 50 percent more orders for premium versions of the wine than it expected this year, spokeswoman Kyoko Uchida said, without giving a figure.

Hakone, a hot-spring area about 80 kilometers (50 miles) southwest of Tokyo, is luring visitors who want to bathe in the new wine. Hakone Kowakien Yunessun, owner of one of the area’s largest spas, will open its Beaujolais bath from Nov. 21 for 10 days. The operator says its employees pour two or three bottles of the wine into an outdoor pool several times a day.

The new grapes are good for the skin, and no, you won’t get drunk, its website says.

Katsuta, the call center worker, hasn’t decided whether to head home or meet friends after work on Nov. 21. What’s certain is he’ll be having a glass or two of Beaujolais Nouveau.

“Even people who don’t usually drink wine will buy a reasonably priced bottle and celebrate,” he said.

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net; Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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